In 2015 alone, more than $326 billion was spent on home improvements and repairs in the U.S. The relative numbers are the same in the U.K.
There’s no doubt that there will always be a need or desire for home improvement. Being in the home improvement business is a good idea. But are you making the most of the situation?
If you’re ready to grow your small business, read on. We’ve outlined the most effective ways to capitalize on consumer demand and increase your profits.
Make a Plan
You wouldn’t be alone if you started your home improvement business with not much more than tools, know-how, and a commitment to quality work. That’s a great way to get things off the ground.
But growing a business takes more than a willingness to work hard. It takes planning.
Start with a business plan template to help you think through the most critical aspects of your business.
Know Your Target Customer
In any business, it takes time and money to find, nurture, and serve customers. Identifying your target customer helps reduce your customer acquisition cost (CAC) and build customer loyalty.
Think of your ideal customer. What do they want and need? How do they behave during home improvement projects? What’s their budget? Do they like generic and simple houses or custom-built sexy homes?
A clear picture of the customer you’d like to work with helps you create a business that will attract that kind of customer. Getting to the next level of success often starts with zeroing in on fewer ideal customers, not more of any kind of customer.
Find the Right Suppliers
A home improvement business is nothing without the right suppliers. The materials, tools, and sub-trades you choose affect your product and service.
To grow your business, you might need to find different suppliers or renegotiate terms with existing ones. But don’t only address cost per unit. Quality, reliability, warranties, and brand image are other factors to consider.
Shopping around for new suppliers by visiting showrooms or going to each company’s website can be time-consuming. Instead, check out sites like BBK Direct. You can browse through and compare thousands of supplies for your home improvement business, and order what you need in minutes.
Promote Your Home Improvement Business
How will your ideal customer find you?
Effective marketing is essential to more than attracting customers. It’s also key to profitability. Getting your home improvement business to the next level of success can hinge on promotion.
To grow your business, review your existing marketing tactics. Identify the ones with the highest conversion rates. That is, identify the tactics that turn the most prospects into paying customers.
If none or few of your current marketing efforts are as effective as you need to grow your business, look to your best existing clientele. Ask them about their marketing preferences.
Do they prefer word of mouth recommendations from friends or online advertising and reviews? Do marketing postcards motivate them to buy or do they respond more to email newsletters?
Choose one new promotional tactic and put it into action. If it’s effective, great. If not, stop and try another until you have the mix of marketing tactics that’s right for your business.
Don’t Do It Alone
If marketing isn’t your strong suit, don’t fret. Hire a freelancer or, if your budget allows, an employee dedicated to marketing.
Sometimes, the best way to grow your home improvement business is to leverage the expertise of others. For example, if you excel at construction but could be better at design, focus on building project-based partnerships with a designer or two.
This approach can be applied to any aspect of your business. From accounting to waste management, distributing the workload is the key to many savvy entrepreneurs’ successes.
Look at Your Numbers
It’s basic but bears attention: business growth isn’t best measured by how many customers you have. Revenue and profitability tell a more valuable story.
The goal is to make your home improvement business efficient with its resources. But how do you know if you’re being efficient? Start with the numbers.
List, with exact amounts, all costs annualized, including:
- Administrative overhead
- Time spent on sales
- Marketing materials
- Customer service
- Licenses, fees, and taxes
- Staff hiring, training, and supervision
Then note your annual revenue, number of customers, and average price per project.
What story do your numbers tell? It’s often a good idea to work with a business consultant or accountant for this exercise. They can give you an objective view of your pricing model and balance of costs.
When running your own business, it’s easy to get caught up in day-to-day operations and lose sight of the bigger picture. Growing your home improvement business could be a simple as a small increase in rates or hiring for different skill sets.
But you can’t know for certain without looking at the numbers.
Monitor Your Plan
It doesn’t matter how simple or elaborate your growth plan is, you need to monitor and manage it.
Once a month, check your plan document. Does what you and your team spend time and money on every day get you closer to your stated goals? If yes, is there objective evidence that you’re nearing the goals?
If what you’re doing doesn’t relate to your goals, why are you doing it?
The key to plan management that leads to success is knowing when to make changes. It’s probably not a good idea to change course after one month of not making progress toward your goal. But after six consecutive months, either changing the goal or reworking the efforts meant to achieve would likely be warranted.
Plans are like maps for road trips. Adjusting to conditions around you is necessary and wise. There may also be times when you need to speed up or slow down.
In other words, growing your home improvement business is a journey. Know your destination, make your map, get the right supplies and team, and then take action.
Along the way, check out more resources for marketing and improving your business.